Afternoon Tea in Jerusalem Blog

In addition to my work as a business coach, one of my interests is blogging about life in Israel. This is a country full of contrasts – over eight million citizens living in an area the size of Wales. You can see snow and the lowest place on the globe in the same day. Although surrounded by geopolitical extremes, Israel has achieved a decade of high economic growth. My work brings me in contact with an array of new companies, exciting technologies and dynamic characters. Sitting back with a relaxing cup of strong tea (with milk), you realise just how much there is to appreciate in the Holyland. Large or small operations, private sector or non profit, my clients provide experiences from which others can learn and benefit.

For the Tel Aviv Stock Exchange (TASE), 2014 was a year of change. A new management team was brought in, led by the experienced Yossi Beinart. The institution moved premises. And for all the upheaval, the main TA-25 Index managed a 10% shift upwards.

TASE has seen some heady days since the turn of the century. Despite great geopolitical uncertainty, for a decade it outperformed most other emerging markets. It has joined the elite group of international stock markets. It is clearly a main generator of new financial growth for the Israeli economy.

However, the outcome for 2015 is looking confused. The Ha’aretz newspaper listed at least four reason why investors are holding back. These include economic uncertainty due to weak fiscal policy, key sectors failing to perform and the continuing quandary of too much money chasing too few quality stocks.

In parallel, the set up of TASE is raising questions. Using stats from Ernst & Young, the “Calcalist” newspaper compared TASE to 9 other similar exchanges, such as Sao Paolo, Toronto and Johannesburg.  Bottom line, while the average EBITDA – profits before financial items and taxes – was around 50% for the table, TASE came in with a mere 20%.

The key explanation for the gap lies with government regulation. It is cumbersome, creates paperwork and results in hidden expenses for all. In other words, those civil servants who are supposed to be encouraging foreign investors to visit Tel Aviv are ensuring that they go elsewhere.

Is there hope round the corner? Yes, there are signs that American financiers are looking to Israeli capital to finance growth in the real estate markets. It must be stated that the significant change will have to wait for after the elections of March 17th. The hope is that the new government will have the courage to initiate the necessary reforms, finally.

Over the past month, I have been presented with three new clients. All of them can be defined as small or medium sized established family businesses, operating around Jerusalem, Israel.

As a business mentor, with a specific interest in commerce and strategy, I was thrown the financials. I was supposed to come up with expressive excel spreadsheets that would explain away what had happened. From there, I was required to  shine some light on the solutions.

Well, there were no prizes on offer when I proved that sales were stagnant (or worse), as the costs pushed upwards. As the clients took on loans, the finance line also bulged outwards. The cash flow….was not flowing freely.

My attention turned to the line of ‘gross profit’. This is often defined as the difference between revenues and the cost of goods sold. These costs can include purchases of raw materials and production workers. It was noticeable that in all three cases, this profit ratio was under 30% and dropping. In other words, there was not enough money to pay for overheads and fixed costs.

A business coach like myself automatically knows that an experienced CEO has already rushed to clamp down on costs. He (or she) knows how to squeeze his suppliers. He will fire workers if needs be. He will compromise on a price in order to achieve a sale. So what more can be done?

One person actually told me that he did not want to see my numbers. He had spoken to so many analysts in the past. What was he do with more percentages and comparisons?

I have previously commented on how many firms rashly slash advertising expenditure at this period. It is simple to do, incorrectly seen as a less painless option. However, what the financial statements do not reveal are the time management skills of the CEO. Very often, when a business is in trouble, the CEO finds himself stuck in the office, ‘putting out fires’. That is how he keeps control, but of what?

By staying inside, the CEO has no time to go on the road. He does not meet new clients. And that means extra sales are never seen by the accountants. Thus the cycle of commercial doom enforces itself.

All three CEOs winced visibly when I suggested that they come up with a work schedule that releases 20% of their time to direct marketing. They wriggled even more when I asked them to consider the alternatives – a further reduction in revenue.

Wix is a successful Israeli start up, whose platform is the base for nearly 60 million websites.  It is outperforming analyst predictions on NASDAQ. And this week, its clever advert during the Superbowl ensured that another 100 million plus people were exposed to its capabilities.

According to one Hebrew financial commentator, 2014 will see revenues of around US$140 million. Of that, US$10 million – about 7% – was spent on the Superbowl publicity stunt. And I am not sure if that included payments to the star performers.

Is it worth it? Yes, loads of new potential users, but for that price? Surely, Wix could have found a more effective medium? Worth considering, and yet……..

Tomorrow, I will start to work on the file of a new client, an established enterprise based just outside Jerusalem. They are in trouble, looking for an other loan, which will simply allow them to pay off a previous loan. A quick glance at the financials reveals that sales peaked 2-3 years ago. There has been an attempt to close down the overheads, and that includes advertising. Here, expenditure has shrunk by half.

Whoppee! A substantial saving, it would seem.

However, here is the catch. One of the lessons of the Great Recession of the 1930s is that those companies who survived the economic downturn tended to be those that had invested in advertising. They ensured that their customers and potential new customers knew where they were.

My client, like many before him, has opted for the opposite direction. Thus, faster than he can control his costs, I believe that his core revenue base is shrinking. Bad news. As his business mentor and consultant, it will be my task to point out the misfit.

Wix is a young, arrogant and assertive company with a bright future ahead. Its understanding of dragging eyeballs to view its service – the importance of not relying on past glories – is a lesson for all small companies around the globe.

For the past two decades, the Israeli economy has created an excellent reputation, basing its rapid growth around high tech – the start up nation of the Middle East. Assaf Kassel, 35 years old and father of two young kids, typifies this trend.

And like many of his generation, Assaf allowed his surroundings to teach him to seek beyond what he was trained to do. He left the world of computer terminals and set up………..

………well, let me digress here. You see Assaf has just won a prize for one of the best small companies in Israel, proving that the economy of the Holy Land is not just about the challenging the boundaries of science. And I was stunned by what he has achieved.

First, contrary to the advice of his colleagues, he established a business based on a gut reaction.

And what is that business? Arab Instruments is all about purchasing quality musical instruments from around the Middle East, and then reselling them to clients overseas. The company has based its success around a large range of online video clips, showing off the prowess of its products.

Second, embracing the culture of others, Assaf has found a brilliant antidote to the language of violence that haunts the whole region. While there are those that advocate boycotting Israel, a sinister flashback to Nazi Germany, Assaf is communicating via music and trade with those who would not normally be in touch with Israel.

For the record, Assaf was not the only winner which crossed assumed ethnic lines. Juha Guesthouse was jointly established by a Jewess and her Arab friend. Situated in the Mulim town of Zarka, near the old Roman port of Ceasarea, they too have shown how people can come together. The clientele is as mixed as the commercial partnership.

And what do these anecdotes say about Israel’s economy? It is big enough for everyone, whatever your religion or political views.

It has become comfortable professional practice amongst international journalists to blame Israel for all the economic woes of the Palestinians. Even during International Holocaust Day, respected Sky News anchorman, Adam Boulton sought to compare the systematic slaughter of 6 million Jews to the current hardships of those in Gaza and the West Bank.

In terms of sound bites, one has to wonder why such communicators did not mention how over 2,400 Palestinians have been killed or disappeared amidst the violence in Syria. Similarly, there is silence re the dozens executed by Fatah and Hamas regimes. Surely, this environment of violence and hatred must act as a bigger downer on the Palestinian economy than Israel’s actions.

As for the facts on the ground, we known that the Palestinian economy is dependent on donations. One of the largest component of this is UNRWA, the United Nations Relief and Works Agency. Its current annual budget, ignoring special projects, runs to over a billion dollars, putting it as one of the largest international charity in the world. Major donors include Britain and the European Union. UNRWA runs a dedicated assistance programme to help Palestinians rebuild homes. Of the US$ US$585 million dollars promised, barely 25% has been handed over.

Interestingly, despite the name and its initial history, UNRWA is not controlled by the UN. It has no external accountable nor transparent reporting procedures. Thus distributions disappear. When you consider that its educational facilities became army camps for Hamas operatives during last year’s war with Israel, you have to wonder who truly benefits from the hundreds of millions of UK, European and American taxes.

The weak tax base of Palestinians has long been a cause of concern for the IMF and the World Bank. Poor government practices do not enhance the collection process. In parallel, Palestinians are understandably angry at Israel’s decision to withhold excise collected on behalf of the Ramallah Finance Ministry. This is worth over US$100 million a month.

Whatever Israel’s reasoning, Palestinian civil servants, the largest group of wage earners in the economy, are yet again not receiving full salaries. On the other hand, the Saudis have just delivered US$60 million. Similarly, Iraq and Qatar have promised a further US$50 million together. Why does the man in the street not feel these contributions?

And how are Hamas and others able to fund the rebuilding of their military prowess?

The average Palestinian deserves better from his and her leaders. There may not be a lot of joy around, but money is out there, as videos of shops for the elite prove time after time. Palestinians are being deprived of the basic right to receive their fair share of public monies, yet Israel takes the rap.

If you are looking for a suggestion: I note that Iran does not help out with the UNRWA budget. And yet according to an article in the Hebrew newspaper “Calcalist” (Economist), for all the sanctions imposed on Tehran, the Ayatollahs make sure that Hizbollah receives a cool US$100 million annually. Now if those weapons were converted into ploughshares…..but that would require a desire to seek peace.

I am often asked the question by potential clients: Should they seek help from a business coach or a psychologist?

Well, as a business mentor and consultant, operating in Jerusalem and Tel Aviv, I guess that most of my responses reveal a natural bias. However, the issue came up again last week from a very different angle. I realised that three of my current clients are psychologists by training. Now that struck me as unusual.

One is very much still practicising their skills. A second has moved to a related field. The third has long abandoned the profession. Each is trying to set up or expand their business. Each one is trying to grapple with challenging commercial approaches. And, each one is held back by ‘self issues’.

Interestingly, many of their problems can be found amongst those people who might have approached them for help: procrastination, self doubting, complicating simple problems and much more.

So does that mean, if you have a business problem, you must turn to an experienced business coach?

David Clutterback in his book “Everyone Needs A Mentor” cites an illuminating case study. Tennis players were briefly coached by specialists from another sport. The result was that the players discovered new skills and strengths.

Similarly, I recently spoke to a senior jet-setting executive. They view their therapist as ignorant on business matters. However, the exec readily admits that the same therapist has a reamrkable ability to put their finger on key financial weaknesses.

Bottom line? There is no all-encompassing answer. A good psychologist should appreciate the complexities of other professions. And a true business coaches will accept that few decisions are made rationally. You have to feel comfortable with the person who is going to help you, understanding that this may become a relationship that could last months or longer.

The start of 2015 has seen Israel’s economy face a string of fiscal and monetary challenges. This uncertainty is fuelled by political uncertainties of an unexpected general election campaign, which will peak on March 17th.

Yet despite these distractions and the war last summer with Hamas, “Israeli high-tech-company exits reached a record of close to $15b last year, double 2013’s $7.6 billion.” And 2015 looks to have commenced in similar fashion. Within the space of 48 hours, “two Israeli startup companies have been bought for a combined $570 million”.

What is impressive this time are the names of those people backing Israeli tech and its future. For example: –

1) Amazon.com has finally taken its first step in the Holy Land. The company has purchased Annapurna Labs, which is involved in the semiconductor space. Significantly, it is expected that the US$ 350m deal will launch an r&d base in the region for the conglomerate.

2) Dropbox is another first-timer in Israel. It now controls CloudOn, a developer of mobile productivity tools with an engineering hub in Herzliya. The deal is valued at around US$100m.

3) Alibaba, the on-line retail giant, conducted a high-level visit to Israel just recently. The first result is the acquisition of Visualead from Tel Aviv. For US$6m, the Chinese company will grab hold of a new set of codes that can be scanned by smartphones.

4) Harman Industries Inc. makes vehicle entertainment and information systems. It has taken over Red Band Software for US$200m. The company “provides software for remote management of mobile devices, including tablets and smartphones. The company says that its product is currently installed in more than two billion cellular devices.”

Many other names could be added to this list, such as MasterCard, Samsung and Verizon. What is encouraging at a time of yet more stress in the Middle East is that many of the world’s commercial giants are upping their faith in Israel.

It is the question that every business faces: How can I ensure that my customers will choose my product or service?

Do I cut prices, advertise, offer a coupon, launch a 2 for 1 deal,………? Somehow, the gimmicks seem to repeat themselves the world over.

So how is this for a case study? Nati Bar is a 33 year-old CEO of Roladin, an upmarket chain of patisseries-come-restaurants in Israel. She overseas around 50 branches, with a further 10 opening every year. Nati observed in a newspaper interview that during the Jewish festival of Chanukah last month, when according to custom people go out and buy doughnuts, Roladin sold 4 million of these sticky, sugar-loaded cakes.

And here is the catch: For years, Israelis have benefited as shops come up with ever more fancy recipes, usually with each one filled with more calories than the previous attempt. What Nati’s team noticed is that people “choose their doughnut according to what their eyes see“. Apparently, it has very little to do with price, dietary considerations, the filling or otherwise. And as such, Nati had sent her team to Paris earlier in the year to learn some tricks of the trade.

Actually, what Nati is saying is something very simple and practical. For all the modern techniques of social media and population segmentation, what it comes down to is identifying your customer and listening to what your custome wants. Then you can go out and validate your solution, before you launch a full sales campaign.

Note that I said that Roladin has placed itself a slightly above its competitors. That said, in a market of 8 million people, it is surrounded by rivals, several of whom are more outlets. However, Roladin never openly competes on price.

One of the most common challenges I face as a business coach is how to show my clients that they can reach out to markets, especially when they start to think away from the standard solutions. The Roladin concept in Israel proves how to attract new clientele to your products.

It is the time of year, when you read summaries about great new Israeli technologies of 2014 that flowed out of the  land of milk and honey, the country of the start up nation.

Less than two weeks into 2015, and we are already witnessing a new list of disruptive Israeli technologies that should hit the high-tech chat lines. As if to prove the point, Vertex, Fortissimo and others have all launched new investment funds just recently. And two days ago, yet another anti-fraud software house, Intellinx, was snapped up by an American giant.

For all the hype, there are plenty of companies that remain under the radar of most potential investors. I would like to highlight five such start ups, which when proved successful, hopefully, each will a significant change for the better in lives of many around the world.

(Disclosure: I have an interest in three of the subjects listed below).

NDT Ultrasonics has perfected a capability to detect multiple impurities in fluids and then break them down. The results are available in real time and the solution can be provided immediately. Significantly, the potential fields of application are numerous; health, food, water supplies and more.

NDT’s first project is likely to be in India, where trials are about to commence testing milk of local farmers. The suggested product is extremely price competitive for such markets.

Marx Biotechnology Ltd offers exciting hope to all those about to undergo bone marrow transplant. Today, the instances of where the transplant rejects its new host – Graft Versus Host Disease – are still far too high. The result is usually tragic. Marx Bio has patented is its knowledge about a specific molecule, whose change causes such rejection.

The company has just launched its first trials in humans. In the long term, Marx Bio is looking to save the lives of tens of thousands around the globe. And its actual product? Simple to manufacture, requires little additional training for doctors, and will save millions in health costs.

SCiO is a hand-held sensor that has already raised US$2 million through a crowd funding campaign. It does not get much more practical than this; direct the instrument at an item of food and you will find out instantly the chemical content of what you are considering to devour.

The Tel Aviv-based outfit has just won the ‘Last Gadget 2015” prize. Is this the end of false advertising in the food industry?

H2Energy Now is located in Beersheba, the geographical centre of Israel. This company has been bootstrapped from the go. Against the odds, the owner has not just created a working prototype that converts energy from water. The key is that the new energy – for the home or corporate environment – is stored in a highly efficient and unique manner.

What makes this product stand out in the alternative energy market is the fact is that it can operate 24/7, regardless of the seasons. The company was recently accepted to a hightech incubator and is currently seeking a partner for a pilot study.

Somewhat cheekily, my final choice is not something normally associated with Israel. The Milk and Honey Distillery is a partnership that has created the country’s first commercial whiskey. From the outset, the team recruited the talents of got Dr. James Swan, one of the world’s finest master distillers. And first official tastings should be available during 2017. And if you do not believe that whiskey can emerge form warmer climates, just look at the successes of the Indiana and Japanese industries.

Thousands of years later, beautiful miracles continue to emerge from the land of Israel.

Lack of confidence is one of those things that many of us suffer from. There are prople who sneak off to the back. There are others who shout to cover up insecurities. And some…well, they prefer not even to turn up.

Confidence building is a subject, which attracts bloggers. It is like procrastination, which I wrote about yesterday. So many people bark what you have to do, without every having been there. Consequentially, at the end of the day, the advice misses the mark.

For example, I refer you to a new article: “Learn the 7 secrets for building unstoppable confidence”. Yes, there are many good points here – not copying others, being focused, etc. But something is missing. Having been there – done that, it was obvious to me at once what the author should have added.

With hindsight, I was shy. I was also taught not to be pushy. So the two inertia merged handsomely. Worse followed as I began working in Israel, a very dynamic environment, where many push themselves forward. So I dropped back even further.

However, something changed. Actually, for me, there were two incidents, both with a similar ‘eureka moment’ attached to them.

First, I attended a seminar, addressed my boss at the time, who spoke badly on a subject, which I knew well, but everyone accepted his judgment. I said to myself: “I know better than this. If only I could find a way how.”

A few years later, I found myself listening to colleagues, who were trying to destroy a classic business model for coaches and mentors. I was convinced they were wrong, and immediately realised two things. I did not need to waste my time arguing with them. If I was able to do it by myself, I could just go right ahead without asking for anybody’s permission. that is what happened. What followed is a very happy new career.

I believe that professional psychologists call this ‘resilience’. Somehow, I found the confidence to become self-motivated.

Today, as a business mentor, I am thrilled how I am able to impart my own very practical approach to my clients. By merely asking the question about what skills a person possesses can sometimes lead to a positive change in itself.

This background may sound a bit showy. The anecdotes are designed to illustrate how people can progress at work by latching on to the very innate talents that they already possess. To achieve this make take time, but it is usually very doable.

I am a business coach. If I was to take a quick survey of my clients, at least a third of them curse their poor skills in time management. Bluntly speaking, they procrastinate.

What does this mean? Spin it how you wish, these are people who ensure they are preoccupied doing anything and everything, except focus on their main work for the day.

Please note that one thing they are rarely very good at is looking at their bank account. That is just too painful. The large minus sign would show them just much they avoid getting on with key tasks. The danger of the wake up call is thus averted.

Tips to stop procrastination? There are dozens and dozens of blogs and infographics, ordering the sufferers as to what they must and must not do.

Let me take a different track, a more practical approach, and it based around what happened today in Jerusalem. For roughly 24 hours, the city closed down, and the main roads away from the holy sites were closed, as a brief  snowstorm circled above.

We had been warned and I had prepared a list of work-related tasks to carry out at home. BUT, and a big ‘but’ at that: Would I be able to convert my good intentions into concrete actions? After all, for years, I myself was the king of putting things off. Nobody knew the tricks better than me.

Well, I started the day with a few simple matters to check. Picking up in confidence, I wrote a couple of reports. I made sure I only resorted to a two minute break between longer tasks, rather than carrying on at all costs. In fact, I ended up writing five documents, on top of several phone calls, and ……..

Well, the last thing I wanted to accomplish was to write a blog.

Hats off to the next wave of bad weather.

 

After barely two years, Israelis will be going back to the polling booths on March 17th. Historically, general elections in the Holy Land are determined by which party is perceived as the most capable in defense and foreign affairs.

On this level, incumbent Prime Minister, Bibi Netanyahu, has consistently performed well in the polls over the years. Certainly, there is a feeling that last summer’s military operation against Hamas in Gaza was planned and executed with competence.

However, if you listen to the chatter of the candidates, government and opposition, it is all about the economy; what is and what is not in people’s pockets. It is a matter of ‘perception and feeling about spending power’. However, Bibi looks to be playing on a very sticky wicket.

Economic Growth: While the Israeli economy may be set for a reasonable 2015 and yes “2014 was an excellent year for Israeli high tech“, the spark seems to have disappeared. For the first time since Israel joined the OECD in 2007, growth per person (0.7%) was lower than the whole OCED average (1.3%).

It is interesting that this week also saw the release of stats that show how for the first time in a decade, people are buying less food. The 1.63% drop was specifically felt amongst the large supermarket chains.

Price Rises:  January 1st has revealed significant price reductions in the cost of petrol and in the water rates. Great. However, as the government has no ability to tackle the electricity monopoly, the prices here just do not budge. Further, it is accepted that municipal taxes are set to be hiked after the election,a nd who knows what else is in the pipeline. While most workers in the public sector will enjoy a 1% pay increase this month, the top boys will receive 2.5%. Fair?

New Economic Wealth Belongs To…?  There is a hidden rule of thumb that those people who ‘make it’ in high-tech deserve to keep their riches. Their talent and chutzpah got them there. Somehow, when it comes to the offshore gas rigs, the public thinks otherwise. It is true that the government coffers will benefit from this new wealth, but has the Treasury, under Bibi’s directives, surrendered too much tax money to the private sector?

What is worse, now that a public debate has erupted on the matter, Bibi has demanded a rethink. OK, but this has landed him trouble with powerful American investors. They have called in their friends in Washington, who wrapped Israel over the knuckles. What a mess!

Social Issues: As things stand at the moment, Bibi’s Likud party will field only two women on its election list in realistic positions. This has caused a rumpus in the press and amongst pressure groups. As if that is not bad enough, a leading social commentator, Tami Arad, has posted a strong article condemning the government’s position towards pensioners.

Housing: There has been talk for years on how to prevent the perennial surge in the price of housing. Those who are specifically feeling the heat of the bubble market are young couples, call them first-time buyers if you wish. Despite expectations and hopes, the outgoing government has yet to deliver a solution.

Netanyahu’s explanation for the woes are simple and precise. In a special television interview last night, he handed out his blame list for the ills. Although he has been in power for much of the past decade, he included several opponents, but not himself.

We also saw on the news how the Israeli Prime Minister delivered a speech to the party faithful. When he mentioned defense and geopolitical issues, his comments drew strong applause and cheers. When he touched on the economy, the activists in the hall were ominously and erringly quiet. What kind of dawn will the 18th March bring to Israel?

You hear of great business leaders or organisers of investment events espousing the virtues of ‘having a vision’. Have you ever considered what that really meant? And just why is this virtual concept so important for all of us, even for those just starting off on the road towards commercial glory?

Step back a moment. The idea of ‘vision’ has been around since day one. Look at Joseph in the Bible. For him, it was not about older siblings or fellow cellmates, but where these events would lead him to and why. Similarly, Moses – however great the story of the Exodus, that in itself was not the end game.

The importance of a solid vision is it lands you with concrete focus point to aim at. Thus, you know which resources to gather that will help you to succeed. Let me explain.

As a business coach, I ask people what is their vision. The frequent reply is: ‘we want to make money, and lots of it’. I say fine and suggest that they buy a lottery ticket rather than sit down with me. ‘Oh, that is not what we meant.’ … And at that point, they have little further to offer. A road to nowhere.

Yes, a vision actually has to be something specific.  What I look to create is a sentence like: “In five years time, I want to have created a business that will be selling X to Y, securing a place in the local community and driving a salary for my family in the region of a million bucks a year.”

The fact of the matter is that so many businesses drift. As they do not have to invest resources into moving towards precise goals, they become tied down with putting out fires. To give you some examples of what I have seen in the past year:

  • A retail operation so concerned about petty staff politics that its sales suffered. That has had a knock-on effect re stock management and other issues.
  • Several high-techies have emphasized their innovative technologies to the point of ignoring what they are trying to establish – a business. Thus, the investors have been turned off.
  • Service providers insistent on telling off potential customers why they have made mistakes by not coming to them in the first place. The customers just move on again.

Small business owner or CEO of a large company; Just starting out or been in commerce for years; Whoever you are, just take a few moments to ask yourself what you are truly trying to achieve. A concise answer should throw you in some  very helpful and new directions.

Israel struggles to be reported in a positive mode in the global media. Yet her economy continues to move forward. Despite all the geopolitical concerns, as we enter 2015, there is much for the world to share in Israel’s continuing financial success.

First, as I discussed yesterday, the growth figures for 2015 are being revised upwards. If 2014 will see figures of around 2.5%, barely matching changes in population, 2015 will see a spurt of about 3.2%. Much of the improvement is due to the export performance.

Second, Israel’s high-tech sector continues to please overseas investors. “Exits doubled to a record $15 billion in 2014. This has been by far the best-ever year for the country’s high-tech and biomed sector in terms of exits.” That is around double last year’s total. In a year, when much of Europe’s economy continues to reflect retraction, these numbers reflect a major achievement.

As if to prove the point, just consider the app “Music Messenger“, a very simple way to send music from one mobile device to another. Based on a small kibbutz,  “the Series A investment round reached $5 million from top artists in the electronic dance music (EDM) and urban communities, as well as managers and executives including: David Guetta, Tiesto, Avicii, Nicki Minaj, Sebastian Ingrosso, Dave Holmes (manager of Coldplay), etc“. Next June, it intends to launch in China with a large concert.

Third, for all the political uncertainties and despite Gaza’s war with Israel, Israel gas production is coming on line and beginning to generate extra revenues for to pay for public services. Unemployment has fallen to 5.6%. Tourism held up in 2014, maintaining the strong numbers of 2013.  And the Tel Aviv Stock Exchange progressed by about 11%, a reasonable performance given the surrounding instabilities.

Wishing all of us have a prosperous, happy and healthy 2015.

At a time when Israeli politicians have launched themselves into an unwanted general election, the local economy is showing signs of great resilience. And that is the reason that yesterday the Bank of Israel left its rate of interest unchanged at 0.25%.

What are the telltale signs?

The shekel has weakened 13 percent against the dollar since the summer rate cuts, helping exports that drive economic expansion. The improved climate has coincided with a decline in unemployment to 5.6 percent, its lowest level since at least 2012………….(And) growth will accelerate to 3.2 percent in 2015 before slowing to 3 percent in 2016…….

I can add to that three other indicators

First, the economy is gradually overcoming the setback of the summer, when the unexpected war with Gaza thumped large sectors of society. For example, it is estimated that the economy in the south of the country, highly dependent of the tourist season, took at 35% hit.

Now, there is some form of rebound in play. By way of anecdotal evidence, I know that many of my clients are engaged in heavy advertising, which is very unusual considering that we are entering the ‘low sales months of winter’. They are seeing an unseasonal spike in sales.

Second, Israel’s idiosyncratic election campaign could actually be helping the economy. It is not just that many of the parties have identified social issues as the Achilles heel of the outgoing government. As I have mentioned previously, new public expenditure policies are frozen until the next government is installed, probably not until may 2015. The attorney-general has been very clear that he will clamp down on ‘election-economics’. Thus, there is little scope for overspending. Overseas investors will be pleased.

Third, and many most important, the Israeli public is far more sophisticated in the past two decades. It now longer waits for politicians to make decisions. A recent blog considered “five reasons why Israeli start ups are so successful“.  To sum up: It is all about the old Ben Gurion addage, the country’s first Prime Minister. Everything is impossible until you have tried to change the situation.

Israelis do not wait around for things to happen, but try to initiate new things. It is in that sort of environment when economies and societies are likely to move ahead, and beyond the expected norm.

If you are 20 something years old, you are already Facebook-Twitter-smartphone-Tumbler etc savvy, and probably playing on all of these as you read this.

However, vast numbers of people are aware of all of these “aids” but do not know how to use them, let alone why they are useful. And I am referring specifically to those in business, whether managers in companies or self-employed. These are skilled and intelligent people, who if they were forced to answer honestly, would admit that they are barely familiar with the basic functions of word and excel. So, when it comes to social media, forget it!

I am a business mentor. And the same questions comes up all the time, be it from new businesses, independents, manufacturers and others. Why should I have a website? What is the difference between that and Facebook? And where do Twitter, LinkedIn and others fit all? In fact, is this just one big bluff – a waste of time, money and effort?

They have a point. I have heard of so many clients, who are approached by so-called experts in google ads or facebook or SEO campaigns, selling their services. I am asked for my opinion. And I ask the trick question – can these geniuses deliver new customers? “Well, they will create billions of ‘likes’ and get me to the first page of a google search. And that will do the trick, won’t it?” Er……….

Three months later, I receive a report about zillions of likes and click throughs. However, our experts discretely do not produce a sales report, whose figures have not budged. And why? To find out why, let us go back to basics.

  1. For most commercial operations, social media is a form of advertising, enabling you to get closer to your clients. And it does not matter whether you use an old-fashioned flyer or sophisticated, first you must identify your target audience and where they can be found. So often, our experts just mentioned do not have the commercial experience or patience to initiate that crucial first step. there are some target populations not available on the net.
  2. Facebook is free. Websites can be created in minutes. However, proper campaigns require an investment of thought, money and time, just as was required in the past. Do not forget that you will need to maintain your sites and update them on a regular basis.
  3. In an age of the instant and globalisation, social media tools allow you immediate contact with your client. Thus, make your campaign smartphone friendly. Most internet traffic is generated on mobiles rather from computer screens.
  4. Why will people read your website? For the same reason that they looked at your flyer or newspaper advert. You need to provide interesting and original content, and do so continuously. That is what drives traffic to your sites.
  5. If there are three key elements to remember when creating material, they were neatly summarised in a very practical blog, referring to new content marketing trends for 2015.
  • Keep the message short and simple
  • Use videos, where possible
  • Consider a geographically localised approach.

Gordon Ramsey on ‘Restaurant Makeover’ recruited new customers via free tasters in local markets. I have a retail client in central Jerusalem, whose sales peak, whenever he hands out flyers to passers-by.

That said, there are some golden opportunities to find new clients via social media, provided you remember the rules of advertising, which were determined long before Mark Zuckerberg’s parents were born.

I do not often do this, but today I want to echo the thoughts in full of Danny Rubinstein. A quality journalist, Rubinstein has decades of experience reporting on Israel’s relationship with the Palestinians, especially from an economic standpoint.

Now, it is no secret that tensions in the Holy City have risen. Extremists on both sides have tried to provoke the authorities. And yet for all that and what the world does not see is that life goes on. My son continues to work with two Muslims in his department. The Jerusalem Municipality, as per every year, will distribute free Christmas trees to Christian Arabs. “Palestinian entrepreneur, Hani Alami, is setting up an accelerator on the city’s seam line to draw budding entrepreneurs from both sides of the city.”

Rubinstein makes a key point. Despite the language of political leaders and the rhetoric of those seeking to provoke, the vast majority of Jerusalem’s citizens, whatever their religion recognize the interdependence. And thus the local economy continues to move forward.

Entitled, “Jerusalem, where economics triumphs over violence”, can be read in full below.

Despite incidents of violence in Jerusalem, demonstrations and escalating tension, the economy is bringing a semblance of normalcy to the lives of Jews and Arabs in Jerusalem.

Dozens of Arab bus drivers have stopped working due to harassment and Arab taxi drivers are afraid to pick up passengers in the western city, and yet the overall picture is not one of disruption, but rather of a citywide transport network that is held together by thousands of Arab workers.

Aside from the hundreds of public transport drivers, the capital’s various truck companies hire the greatest number of Arab drivers, and they are joined by thousands of workers in garages, gas stations and vehicle testing spots. Some are Israeli citizens, like the residents of Abu Ghosh and Beit Safafa, but most, those from the East Jerusalem neighborhoods, are not Israeli nationals but permanent residents with a blue identity card.

And it’s not just in the transport sector. Arab workers are employed in every area in Jerusalem, in particular in manual labor, factories, hospitals, and hotels. This is primarily caused by the separation fence, which cut off East Jerusalem from the West Bank and the employment opportunities there. This separation led to a dramatic shift in the social structure of Jerusalem’s Arab population.

Most of the elite and the professionals left, in particular for Ramallah, where they work as senior Palestinian Authority officials, clerks and managers in the Palestinian banks, company executives, high-tech workers, engineers, lawyers and academics. They are not involved in the Israeli labor market; all are employed in the Arab market.

The more disadvantaged remained in East Jerusalem, where they have the advantage of freedom of movement in the west of the capital and the rest of Israel. There are tens of thousands of construction workers and cleaning staff in hospitals, universities and businesses who prefer to live within the city limits so as not to have to endure the checkpoints on a daily basis. They live in the poor neighborhoods of East Jerusalem, and some even run successful contractor and trucking businesses.

The Arabs of Jerusalem, totaling some 350 thousand people, account for about 40 percent of the city’s population. They have a higher income than the Arabs of the West Bank, but the cost of living is also higher in Jerusalem – especially housing prices, which are sometimes four times higher than in the West Bank.

The Jews and Arabs in Jerusalem are codependent. Where one can separate Israel from Gaza and the West Bank with fences and barriers, in Jerusalem this is impossible, with the Jewish and Arab neighborhoods so intertwined. 

So one may assume that economic rules will prevail over politics in Jerusalem, over incitement and over fear. There is no one to replace the tens of thousands of Arabs who work in the capital; not immigrants, not haredim and not the few middle class left in the Rehavia neighborhood

The waves of violence in the city subside fairly quickly, and the defense establishment is making great efforts, and on the bottom line – the Jerusalem economy is stronger than everything else.

Slowly but surely, more and more Israeli companies are looking to London in order to raise money on the international financial circuit. TechFinancials is the latest recruit. With a technology that enables binary options trading, the company is looking to raise around £15 million on the AIM market with a valuation of £80 million.

There have been at least 9 other Israeli companies who have found their way to London over the past year. The most well-known is that of  Tedi Sagi, the prime owner of Camden Market. He is seeking “to raise £100m in an IPO on the junior Aim market by the end of the year, giving the company a valuation of £750m.”

SafeCharge, which launched an IPO in August and raised £75m, AnyOption for £40m, and Bagir for £20m have all been part of this charge. Significantly, barely a month ago, the British ambassador to Israel, Matthew Gould, led a delegation to London of Israeli companies, which are considering using the aim market. Up to that point throughout 2014, Israeli corporations had “raised a total of £535m , with a combined market capitalization of a total figure of £1.3b.”

In a year when the UK and Israel have not always agreed on the diplomatic front, it may seem ironic that the UK-Israel Tech Hub has seem some extraordinary success. Overall, bilateral trade has grown around 26% since 2013. Future trade delegations will promote cooperation the fields of cyber, water tech and agritech, amongst others.

Israelis find London a very easy place to create new commercial value. English is not a problem for most travellers. Geographically, the distance is only a five hour flight or two hours across time zones. And many of the visitors are familiar with Chelsea, Liverpool and Man United. It would seem that this growth in bilateral trade and financial commerce between Israel and Britain is set to continue into 2015.

If you look at the beginning of the book of Genesis, at least two themes seem to come to light. First, to put it mildly, brothers did not find it easy to live with each other. Second, most of our biblical heroes rushed to start a business.

From the perspective of 5,000 years, everything seemed so easy. Abraham worked in his father’s idol shop and sold well, before he wrecked the place. Issac tilled the land and grew crops. Jacob worked hard and had enough income to support twelve sons and their offspring. etc etc.

Ironically, the lessons from then can still be applied today.

  1. Cash flow. Do not be afraid to plan your cash fluctuations at least 12 months ahead, and do not ignore the fine detail such as stock control. This is where most businesses today fail. In fact, in Israel, “12% of survive less than a year. Only 46% last more than five years.”
  2. Validate. Before starting out, take your product or service and test it methodically in front proposed clientele. The information your garner can be so vital. It could save you making unnecessary mistakes, just when you are most vulnerable at the outset.
  3. Identify the precise opportunity. It is extremely important to be aware of your competition. It is even more essential to pinpoint the opportunity and then to create a business model to reel in that value proposition.
  4. It ain’t easy. There is a very brutal fact, which people underestimate. Very few commercial operations around the globe – large or small – have succeeded without going through some very tough times. There is rarely gain without pain.
  5. Seize the moment.  Many of us deliberate and procrastinate before setting out. This period is often accompanied by wordy and seemingly clever explanations. Yet sometimes, you just have to realise that you have to stop the talking and go for it.
  6. Get help. Do not be afraid to look for outside support. Listen to the advice. And it is not a crime to accept it. Success often means understanding how to find a way use the suggestions of others – a spouse, a friend or even a business mentor.

Starting a commercial operation can be so rewarding for the individual. If you follow these six simple guidelines, it can also prove to be a financial triumph.

So due to the incompetence and bloated egos of various politicians , Israelis will be going to the polling booths on March 17th, two years early than expected.

Assumedly, the peace process will take a back seat for the next four months. There again, Abbas and Obama are also not exactly full of new ideas. As for the economy, an interesting situation has arisen.

In the pessimists’ corner, many observers are full of gloom and doom. For example, one financial newspaper has dedicated three pages to all the reforms that have been put on hold and could even be abandoned:  the ports, the postal authority, import regulations, family law and much much more. In addition, the price of government bonds sunk yesterday due to the impending political uncertainty. And the fact is that to finance the elections, around 1.5 billion shekels (US$0.35 billion) of public money will be ‘invested’.

Worst of all, with the economic growth visibly slowing down, the budget for 2015 will not be debated. That cannot be good for the country.

There again, I find three significant monetary benefits to this four month process of political verbal garbage.

First, starting with the budget, because there has been no run-up period, as for example currently exists in Britain, there is no opportunity for the Prime Minister play ‘election economics’. This is where funds are found for seemingly important public projects in order to secure more votes. That game is off the agenda.

Now consider that postponed 2015 budget, which is unlikely to be enacted before June 2015. In its place will reside the 2014 budget, which will be divided up by 12, until replaced by fresh legislation. That means that here also there is no way to put through new expenditures. In fact, when initially introduced twelve months ago, it was considered fairly restrictive.

A third bonus in this bizarre scenario is the rate of exchange. For several years, the shekel has remained strong against major currencies such as the dollar and the euro. For an economy that imports much of its raw materials that has been beneficial to the domestic consumer. For exporters, the backbone of Israel’s economy, this has been a very difficult time.

However, the political uncertainty has created a further devaluation of the shekel – about 14% since August. Bottom line, almost overnight, Israeli goods and services have become more attractive in overseas markets. The prospect of higher profits should secure more jobs locally.

Do not misunderstand me. There are some very worrying immediate problems. For example, there is a general consensus that the Ministry of Defense is severely under budgeted. The question remains how to find the funds.

That said, the Israeli economy has repeatedly shown itself to be very resilient. The present election campaign must just ensure that zealous politicos do not wreck it.

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